EPA Updates Penalty Calculation Guidance for Industrial Stormwater Discharges

On September 8, the EPA published Supplemental Guidance to the 1995 Interim Clean Water Act Settlement Penalty Policy for Violations of the Industrial Stormwater Requirements. This new guidance applies only to stormwater discharges—including violations of EPA- or State-granted NPDES permits and unauthorized discharges associated with industrial activity—and is meant to assist EPA staff in calculating nationally consistent minimum penalties. It does not cover unauthorized wastewater or process water discharges, nor does it address penalties for construction related activities. The guidance uses broad principles that may not capture all the factors of a particular situation, and it remains within the EPA’s sole discretion whether to follow the guidance. The guidance is to be used in settlements only, and is not intended for use at hearings or at trial by any party.

The 1995 policy is consistent with other EPA penalty policies and directs that a bottom-line penalty should be calculated in the following manner: Bottom-Line Penalty= (Economic Benefit) + (Gravity) +/- ‘(Gravity Adjustment Factors) – (Litigation Considerations) – (Ability to Pay) – (Supplemental Environmental Projects). As described below, the two substantive changes presented by the guide are the removal of two variables from the calculation of the Gravity Component and the removal of two Gravity Adjustment Factors and the addition of another. Besides these two changes the bulk of the document is dedicated to more in-depth discussion of each of the terms in the Bottom-Line Penalty Equation.

  • The formula for the Gravity Component is changed, removing a monthly constant and the number of effluent limit violations. The revised calculation for the gravity component is: Gravity Component = [(Sum of A for each month of violation) x $1000] + B + [D x $1000]. The guide describes the three relevant factors: A (significance of effluent violations); B (health and environmental harm); and D (non-effluent limit violations), and provides the methodology for their calculation.
  • The gravity component may be modified by a Gravity Adjustment Factor. The History of Recalcitrance Adjustment Factor increases the gravity amount in cases where the violator exhibits bad faith, delays the prevention, mitigation, or remediation of a violation, or fails to comply with administrative orders. The Quick Settlement Adjustment Factor can lower the gravity amount by 10% in order to encourage swift negotiation and settlement, within a period of 4, 6, or 12 months depending on the type of enforcement action. Beginning in 2018, gravity amounts will also be adjusted for inflation.

The new guide is completed by two worksheets meant to assist with the calculation of the overall minimum penalty under this policy the calculation of the gravity component.

Upcoming USEPA Brownfield Grant Writing Workshops

If you took an interest in our past posts on developments in the USEPA Region 2 Brownfields program, have a cleanup project that may qualify for grant assistance, or would like to hear about best practices in writing Brownfield proposals, then you are in luck! Between October 25 and November 9, the USEPA Region 2 Brownfield’s team is offering six Brownfield Proposal Guideline Workshops to help applicants understand grant requirements. The workshops are targeted at local governments and nonprofit organizations, and will cover topics including the different grant types and eligibility requirements, the grant application process, and proposal tips and strategies. Registration for these events is free, and can be completed at the following link:  http://www.eventbrite.com/e/brownfields-grant-writing-workshops-for-fy17-guidelines-registration-27939772612. The workshop times and locations are listed below, and can also be found at the flyer and registration links above.

Albany, NY, October 25, 2016

9:00 am – 12:30 pm

NY DEC Offices
625 Broadway Room 129
Albany, NY 12233

Passaic County, NJ, October 27, 2016

8:30 am – 12:00 pm

Economic Development
230 Riverview Dr., Suite 250
Totowa, NJ 07512

Niagara County, NY, November 3, 2016

9:00 am – 12:30 pm

Vantage Center, Suite One
Sanborn, NY 14132


Trenton, NJ, October 26, 2016

9:00 am – 12:30 pm

Thomas Edison University
101 State Street
Trenton, NJ 08608

Camden, NJ, November 3, 2016

9:00 am – 12:30 pm

Waterfront Technology Center
200 Federal Street
Camden, NJ 08103

New York City, November 9, 2016

9:00 am – 12:30 pm

USEPA Office
290 Broadway, Room 27 D, 27th Floor
New York, NY 10007

EPA Raises Statutory Civil Penalty Amounts

If the cost of doing business includes responding to and resolving periodic environmental and worker safety enforcement matters, the price goes up on August 1. The EPA is raising statutory civil penalty amounts for the many statutes the agency administers, from the Clean Air and Water Acts to TSCA, RCRA, and CERCLA. The new maximum penalties, which in some instances will be increased by over 100%, will be assessed as of August 1, 2016 for violations that occurred after November 2, 2015. The adjustment is made in accordance with the Federal Civil Penalties Inflation Adjustment Act (“the 2015 Act”), which requires all agencies, including OSHA, to adjust civil penalty maximums to account for inflation. Following the initial increase, penalties will be adjusted annually by January 15, beginning in 2017.

The adjustments follow the formula dictated by the 2015 Act. The new penalties are set by one of two means, whichever is less. The inflation adjustment is calculated by multiplying the civil penalty amount originally established or last adjusted by statute by the “cost-of-life multiplier” which is the difference between the Consumer Price Index for all Urban Consumers (CPI-U) for October 2015 and the CPI-U of October of whichever year the most recent adjustment occurred. This becomes the new maximum penalty amount unless it exceeds the November 2, 2015 penalty level by more than 150%, in which case that 150% number becomes the new penalty. For example, under the new rule the statutory civil penalty for a violation of discharge permit limitations under the Clean Water Act will increase from $25,000 to $44,539.

The interim rule and the penalties adjusted by the EPA can be found in a table included in the Federal Register which will be incorporated into the Code of Federal Regulations at 40 CFR 19.4. EPA notes that the increased maximum monetary fines will not necessarily change the amount of penalty they will seek under their civil penalty policy, which considers case-specific factors such as seriousness of the violation, good faith compliance efforts, economic benefit gained from a violation, and ability to pay. There is no question, however, that the new penalty amounts authorize the agency to significantly increase proposed fines and penalties. Resolving enforcement matters under the new penalty provisions undoubtedly will become more costly and challenging.

Thanks to my colleague Tavo True-Alcala for his contributions to this post. Tavo is an analyst in our Environmental & Utilities Practice Group.

Corps Jurisdiction Determinations Reviewable

The U.S. Supreme Court ruled on May 31 in United States Army Corps of Engineers v. Hawkes Co., Inc.[1] that final decisions by the Army Corps of Engineers (“Corps”) concerning the limits of its jurisdiction under the Clean Water Act can be challenged in court.

The Clean Water Act (“Act”) regulates the discharge of pollutants or fill into the “waters of the United States,” including wetlands.  The dredging of wetlands is also regulated.  Various activities conducted in areas under the jurisdiction of the Act require a permit from the Corps.  Knowing whether part of your property qualifies as “waters of the United States” and is subject to the Act or not is important.  A property owner who does regulated work without a permit violates the Act, and they may be subject to criminal and civil penalties.  Also, going through the permitting process can be expensive and time-consuming.  So unnecessarily pursuing a permit for work outside the reach of Clean Water Act jurisdiction is typically something property owners would like to avoid.

The Corps specifies whether a particular activity requires a Clean Water Act permit by issuing “jurisdictional determinations” on a case-by-case basis.  There are two types of jurisdictional determinations – “preliminary” and “approved.”  An approved jurisdictional determination is a final action that is binding on the Corps and the Environmental Protection Agency for five years.  The issue before the Hawkes court was whether the Corps jurisdictional determination may be challenged in court.

In the Hawkes case, the property owners challenging the Corps are three peat-mining companies in Minnesota that own 530 acres of land that contain wetlands.  In December 2010, the companies applied to the Corps for a permit for activities related to their mining operations.  As part of the permitting process, the Corps issued a jurisdictional determination that wetlands on the land were subject to Clean Water Act jurisdiction.  The companies appealed that decision internally at the Corps and had a small victory at first when the hearing officer told the Corps to reconsider its decision.  Upon reconsideration, the Corps reached the same original conclusion that the wetlands were subject to Clean Water Act jurisdiction and permit requirements.

The companies filed a lawsuit in federal court to challenge the Corps’ second jurisdictional determination.  The district court decided that it would not even hear the case, on the grounds that the revised jurisdictional determination was not a final agency action that can be appealed to court.  The 8th Circuit Court of Appeals reversed the decision, thus allowing the companies to challenge the jurisdictional determination in court, and the Supreme Court upheld the decision of the Court of Appeals.

In making this decision, the Supreme Court recognized the importance of ensuring a land owner’s right to access the courts to challenge the jurisdiction of the Corps under the Clean Water Act.  Importantly, the decision means that the Corps does not have the final say if a property owner believes the Corps incorrectly determined that certain land is subject to Clean Water Act jurisdiction.

[1] United States Army Corps of Engineers v. Hawkes Co., Inc., 578 U.S. __ (2016).

EPA Brownfields Site Planning Grants

The U.S. Environmental Protection Agency has posted a Request for Proposals (RFP) for Fiscal Year 2017 Brownfields Area-Wide Planning program grants. With estimated funding of $4 million and a maximum grant amount of $200,000, the USEPA anticipates awarding approximately 20 grants.

Funded Tasks

EPA seeks to provide successful applicants with funding to conduct research and/or technical assistance activities that will enable them to develop a brownfields area-wide plan.  Funding will support preparation of an inventory of brownfields, performing site assessments and remediation, community involvement efforts or site preparations. To be competitive, a project must target one or more “high catalyst high priority” brownfield sites within the project area, and implement a plan that addresses the assessment, cleanup, and reuse of the brownfield as well as the revitalization of the area as a whole.

Qualified Applicants

A qualified applicant must be a local government or quasi-governmental entity, a recognized Indian Tribal government, a qualified regional council, or a redevelopment agency or other entity created by a State Legislature.   Qualified nonprofit organizations, including educational institutions are also eligible to apply. Individuals and “for-profit” firms are not eligible to apply.

An eligible entity may submit multiple applications, as long as each is for a different project, but an entity will not receive funding for more than one proposal, with a total funding level of no more than $200,000. Entities that received grants under this program in FY 2010, 2013, or 2015 are not eligible to apply for FY 2017 grants, except for a POWER+ project that is sited in a community/project area with at least one coal plant that was shut down since 2008.

EPA Webinar – June 16

All proposals must be submitted via www.grants.gov by 11:59 PM August 10, 2016. The EPA is offering a webinar on June 16 from 12:30-2:00 PM EDT for interested applicants to walk through the guidelines for preparing a competitive proposal. The webinar can be accessed online via http://epawebconferencing.acms.com/fy17bf_awp/ or by calling 1-866-299-3188 and entering the code 202 566 0633#. There is no need to register ahead of time.

Major Takeaways from American Planning Association’s National Conference

Several R+C Land Use Group lawyers just returned from the American Planning Association’s National Conference in Phoenix, Arizona.  The conference is a great opportunity to get together with planners from across the country, eat local food, and learn the latest trends in land use planning and development.  Here are some conference highlights.

  • One theme that jumped out at the conference was support for planners and developers working together to achieve community goals. At a session titled “Planners and Developers: Same Community, Different Worlds” the panelists presented the municipal staff and developer perspectives on  the permitting process.  The aspect that resonated most with the municipal planner-filled audience was the developer’s description of a project financing hypothetical – in particular how the timing of project costs (such as impact fees and other exactions) can significantly affect economic feasibility of a project.  The audience posed several thoughtful questions indicating that the honest and open discussion had generated substantial insight into the developer perspective.
  • At the “Demystifying Real Estate Markets” session, the panelists explained how local development codes requiring first-floor retail in residential buildings can be extremely detrimental to building successful retail districts.  The oversupply that is generated by these requirements can cause low rents and high vacancies, which will discourage national retailers from locating in the community, or cause them to leave.  The panelists advised the planners in the audience to conduct focused market studies to ensure that development codes requiring first-floor commercial space are appropriate for each location.
  • In a session covering three federal statutes (the Fair Housing Act, the Religious Land Use & Institutionalized Persons Act, and the Telecommunications Act), a majority of planners in the audience indicated that they had not received training on one or all of these statutes. This is a trend that must change.  Each of these programs has significant impacts on the typical process of review and approval of projects, and have the potential to impose liability on municipalities whose agencies fail to comply with them.
  • Phoenix is making great strides in promoting public transit, greenspace, and outdoor art.   Check out the photo album from Lexington, Massachusetts planner David Fields here.

For other insights, check out the conference recap on the RLUIPA Defense blog.

NYDEC Proposes Revisions to Brownfield Cleanup Program

The New York Department of Environmental Protection (DEC) has published notice regarding the proposed revisions to the Brownfield Cleanup Program (BCP) regulations.  The revisions provide a minor revision to the term “affordable housing project” and substantive changes to “underutilized” term, both of which terms are derived from legislative changes in 2015.   These terms are relevant to the tangible property tax credits associated with the BCP.  The “brownfield site” definition is unchanged in this rulemaking.

In June, 2015, New York Environmental Conservation Law (ECL) Article 27 Title 14, which sets forth the BCP, was amended by revising the definition of a “brownfield site.” The recently proposed regulatory revisions aim to clarify the sites that qualify for the tangible property tax returns provided for by the BCP for certain redevelopment projects. These rules apply to New York city, and future rulemaking will address this program statewide.  The NYDEC notice stated that the previous amendments in 2015 addressed differences in the potential state tax liability between New York City BCP sites and sites elsewhere in New York.  High development costs in New York City resulted in what was seen as excessive tangible property tax credits. The two new additions are standards of qualification meant to limit the number of eligible New York City sites. Other standards for qualification include the “environmental zone” (to be adopted) and “upside down” designations, and these standards will still apply.

Brownfield Sites

Prior to the June, 2015 amendment, the BCP definition of brownfield sites included those that had the “presence or potential presence” of contamination which was complicating development of the property. The revised definition of brownfield sites was meant to exclude sites that only had potential contamination from receiving the tangible property tax credits. The intention of only awarding these credits to sites with actual contamination is accomplished by altering the definition to include only those “exceeding soil cleanup objectives or other health-based or environmental standards, criteria or guidance adopted by the [DEC].”

Affordable Housing Project

As required by the amendments to ECL §27-1405, the DEC added a definition for affordable housing project to the 6 NYCRR 375 brownfield regulations. The definition defines this term as “a project that is developed for residential use or mixed residential use that must include affordable residential rental units and/or affordable home ownership units.” These two types of units are further defined as those which are included in a federal, state, or local housing agency’s affordable housing program, or subject to local regulation or legally binding agreements that define the minimum number of units set aside for tenants with a household income of no more than a certain percent of the area median income. Area median income is defined as the median income for a family of four, adjusted for family size, of the local metropolitan statistical area or county. The recent revision to the original amendment makes minor technical changes to the language.


The definition of an underutilized site is changed significantly by the currently proposed revisions to the 6 NYCRR 375 amendment. The primary focus of the rulemaking is the application of the term “underutilized” to qualify BCP projects.  The City of New York supported an industrial development focus for the term.  Others objected that potential “mixed use” developments would not qualify using this definitional framework.  Comments received during the public hearings and comment period on the proposed amendment urged the DEC to expand this definition, which is reflected in the revision. The DEP proposes to allow commercial use with some residential component, subject to conditions.  Rather than meeting all required conditions, as originally proposed, the DEC would qualify projects that meet “one or more of three conditions.”  The conditions include: (1) taxes in arrears; (2) building condemnation or structural deficiencies; or (3) that there are no structures on the site.  The last condition is a new standard for qualification.  In addition, a municipality need not certify the structural condition, as previously required.  The applicant may certify any of the conditions, subject to a structural engineer certifying condition (2).  The municipality remains the authority in certifying the “need for substantial government assistance” to qualify.

Public comments regarding this proposed rulemaking must be submitted to the DEC Division of Environmental Remediation no later than April 8, 2016.  See the public notice for details.

Feds Finalize Prohibitions Against Threatened Bat Species – Disputes Continue

Northern Long Ear BatThe U.S. Fish & Wildlife Service (FWS) issued a final rule under Section 4(d) of the Endangered Species Act (ESA), taking effect February 16, 2016 and imposing measures intended to protect the northern long-eared bat (NLE bat) under its status as a “threatened species.”  Four environmental groups announced their intention to challenge the rule for the increase in timber, energy, agricultural and other industrial activity allegedly allowed in sensitive NLE bat habitat, as well as FWS’s failure to protect the bats as an “endangered species.”

The Service states that its final rule minimizes requirements imposed on landowners, land managers, agencies and others by tailoring the NLE bat restrictions to fit the conservation needs of specific locations and seasons and to include other exceptions necessary to protect public health and property.  However, the final rule still imposes stringent prohibitions against “tree-removal” activities and other incidental takings across a massive swath covering all of New England, the Mid-Atlantic and significant parts of the Midwest, Southeast and other locations as the disease spreads west throughout the range of the species. Tree-removal is defined in the final rule “as cutting down, harvesting, destroying, trimming, or manipulating in any other way the trees, saplings, snags, or any other form of woody vegetation  likely to be used by NLE bats.” This large area known as the White-Nose Syndrome Zone is mapped and updated monthly by FWS on its website. The January 29, 2016 version of this map is provided below. Continue Reading

EPA Launches eDisclosure Portal to Modernize Self-Reporting

Under EPA’s long-standing Audit Policy and Small Business Compliance Policy, companies that discover, disclose, and correct environmental violations may be entitled to penalty mitigation and other benefits. On December 9, 2015, EPA published a Federal Register Notice announcing the launch of EPA’s new eDisclosure system which will modernize voluntary self-disclosures.

The eDisclosure system consists of a web-based portal for reporting both Emergency Planning and Community Right-to-Know (EPCRA) and non-EPCRA violations under EPA’s Audit Policy. The eDisclosure portal does not change any of the Audit Policy criteria, but it does dramatically change the manner in which the Audit Policy is implemented. Continue Reading

Zoning Commission Expertise Due Limited Deference in Eyes of Court

The Connecticut Superior Court recently ruled that the Town of Rocky Hill Planning & Zoning Commission (Commission) exceeded its authority by approving a fill permit application to construct a road at the site of the former Rocky Hill landfill located partially within the Town’s Floodplain Overlay District.  The decision – which culminates a five-year zoning appeal brought by Great Meadows Conservation Trust, Inc. (GMCT) challenging the type of fill material proposed to construct the road – is important for its analysis of when an administrative agency’s interpretation of its own regulation is and is not entitled to deference.

In 2006, Meadow Properties, LLC purchased the approximately 43 acre former Rocky Hill landfill site, which is bordered on the west and the north by Goff Brook – a watercourse that discharges into the Connecticut River.  The site abuts property owned by GMCT, whose mission it is, in part, to preserve the floodplain and its agricultural, scenic, archeological and wetland resources.

Prior to 1979, the site had been operated as a permitted municipal solid waste landfill until the expiration of a solid waste operating permit for the site.  After the permit expired, the former site owner capped the landfill with soil – a process in which certain material is placed on the landfill to stabilize the solid waste therein, to prevent erosion, and to maintain the integrity of the cap.  But in 2008, the Connecticut Department and Environmental Protection (DEEP) inspectors observed areas of landfill leachate outbreaks and other areas where the landfill cap had eroded.  DEEP staff believed that these issues could cause waste to leach into and pollute State waters.

In 2010, Meadow Properties entered into a Consent Order with DEEP specifying the steps to be taken to repair the landfill cap and to complete post-closure monitoring and maintenance.  Meadow Properties also sought to conduct commercial operations to deposit additional solid waste on site.  Later in 2010, the site operator selected by Meadow Properties submitted to the Commission a fill permit application to construct a road using 1,731 cubic yards of recycled asphalt millings.  The GMCT and other residents urged the Commission to deny the application on the ground that asphalt millings were not permissible fill material under the Town’s zoning regulations.  The Commission rejected this argument and approved the application.

But the Superior Court agreed with GMCT that the Commission had exceeded its authority in approving the application for road construction.  The Court found that the zoning regulations did not allow asphalt millings as fill material, since “filling” was defined as “[t]he depositing of clean fill such as soil, sand, gravel, rock or clay.”  The zoning regulations in effect at the time added that “[t]he fill material shall consist of earth fill, woody vegetation, and masonry only.  No trash, garbage, building materials, or junk of any nature shall be permitted.”  According to the Court, asphalt millings did not meet these regulatory requirements.

Perhaps the most important aspect of the Court’s decision is its analysis of when a zoning agency’s decision is – and, important to this case, is not – entitled to deference.  The Commission attempted to justify its approval of the application on the ground that asphalt millings were used elsewhere in Town to repair roads.  However, the Court found this argument unpersuasive and noted that for a zoning agency’s decision to be afforded deference there must be a record of the agency itself interpreting and applying the subject zoning regulation in matters before the agency over an extended period of time.  There was no evidence in the record before the Court that the Commission itself had ever interpreted the zoning regulations governing fill material – only that the Town had used asphalt millings to repair some roads.  Because the Commission’s decision was not entitled to any deference, the Court conducted what is known as plenary review (in which the agency decision is afforded no deference) to conclude that the Commission violated its own regulations.

The Court’s decision sends a strong message to administrative agencies that they cannot justify their own actions using other agencies’ regulatory interpretations or actions that had not been before the deciding agency for approval.

*Brian Smith is a Robinson & Cole partner and chairs the LandLaw section in the firm.  Evan Seeman is an associate and member of the Land Use Practice Group of the firm. Brian and Evan  represented GMCT in this appeal – Great Meadows Conservation Trust, Inc. v. Town of Rocky Hill Planning & Zoning Commission, Docket No. 10-6007251-S (Nov. 16, 2015).